Dollar edges up, as
investors wait on Fed, Jackson Hole
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[August 24, 2016]
TOKYO (Reuters) - The dollar edged
up on Wednesday, moving off lows touched against the yen overnight, as
markets looked to a gathering of global central bankers in Wyoming for
clues on whether the Federal Reserve is poised to hike interest rates
Data on Tuesday showed new U.S. single-family home sales
unexpectedly rose in July, reaching their highest level in nearly
nine years as demand increased broadly, brightening the housing
Central banks will gather in the mountain resort of Jackson Hole
later this week, with markets focused on a speech by Fed Chair Janet
Yellen on Friday.
Recent hawkish comments from Fed Vice Chairman Stanley Fischer and
New York Fed President William Dudley have raised some investors'
expectations that Yellen might also take a less cautious tone.
The dollar inched 0.2 percent higher to 100.45 yen <JPY=> after
nudging below 100 yen overnight to 99.925. The pair has been mired
in a narrow 99.55-102.83 range this month amid a dearth of
directional cues, with liquidity low as many market participants
take summer holidays.
"My forecast for the next few months is around the current range,
because investors are worried about economic uncertainties, and the
U.S. election is coming soon" in November, said Harumi Taguchi,
principal economist at IHS Markit in Tokyo.
The dollar index, which tracks the U.S. unit against a basket of six
major rivals, was up 0.1 percent at 94.650 <.DXY>.
News that North Korea fired a submarine-launched missile had little
impact on foreign exchange trading. The missile flew about 300 miles
(480 km) before splashing into the Sea of Japan, a U.S. defense
"It could have been an excuse for some people to trade, but it
wasn't a major factor," said Mitsuo Imaizumi, chief currency
strategist at Daiwa Securities.
Instead, markets are waiting for Jackson Hole for any fresh signals
on the U.S. monetary policy outlook.
"The number two and number three officials have spoken. Will what
she says be different?" Imaizumi said, referring to Yellen.
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An employee of a bank counts US dollar notes at a branch in Hanoi,
Vietnam May 16, 2016. REUTERS/Kham
Minutes from the Fed's July 26-27 policy meeting showed officials were divided
over whether to raise rates soon, with some insisting that more solid economic
data were needed before any tightening.
The euro was down 0.1 percent against the greenback at $1.1294 <EUR=>, though it
crept 0.1 percent higher against the yen to 113.43 <EURJPY=>.
Data on Tuesday showed that surprisingly strong growth in France supported
stable euro zone private business activity during August, underpinning the euro.
Sterling slipped 0.2 percent to $1.3172 <GBP=> after it touched a three-week
high of $1.3210 overnight after manufacturing exports data suggested that
Britain's economy is holding up surprisingly well in the aftermath of its vote
to exit the European Union.
(Reporting by Lisa Twaronite; Editing by Shri Navaratnam and Kim Coghill)
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